Protection Insurance.

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Protecting your home, your income and your family

Protection insurance is an all encompassing term that means you are protecting yourself, your home, your income and your family against unforeseen events and circumstances that can have catastrophic impacts on yours and your loved one’s life.

This page covers the main protection insurances; life assurance, critical illness insurance, family income benefit, income protection insurance and private medical insurance.  Information is to provide an overview, for information specific to your needs and circumstances, please get in touch.

 

We don’t want you to wait until something happens before you realise the real value of having a financial back up plan in place.

 

Life Insurance

Life Assurance provides a tax-free lump sum which is paid out upon death.  Although its not a legal requirement to take our life insurance to cover your mortgage it is advisable. Having life insurance ensures that your mortgage is repaid should you pass away, therefore removing any worry or financial trauma from your loved ones.
The main difference between life assurance plans is whether the level of cover remains fixed (level term) or decreases over time.
Level Term Assurance provides a set level of cover for the term you choose, which is generally to retirement, the end date of your mortgage or when any children are no longer dependant.
Decreasing Term Assurance covers you for the term you choose, but the level of cover decreases throughout the term of the policy and generally in line with your mortgage loan decreasing. 

Life assurance is the most selfless purchase you will make, as it will never benefit you personally, but it can be life defining for the loved one’s you leave behind

 

Critical Illness

The thought of your family having to cope financially if you were to suffer a critical or seriously illness is never pleasant for anyone. However, it is important to think about if they would struggle to pay the mortgage, rent or other household bills.
Critical illness cover is a form of insurance which pays out a tax-free lump sum if you are diagnosed with a specific illness, or medical condition during the term of the policy.
It gives you financial peace of mind and eases monetary pressures following the diagnosis of a covered condition. It will also pay out if an insurance policy holder unfortunately becomes permanently disabled through either injury or illness.

Critical illness is for living 

 

Income Protection

The unsung hero of protection insurance, the often overlooked policy that can literally be the difference between financial survival.
In a nutshell if you were unable to work due to illness or injury, income protection insurance provides you with the financial safety net of a regular replacement income of generally around 80% of your normal income. Helping you and your family to cover costs and maintain a good standard of living.

 

What is income protection?

Income Protection policies pay out a set amount of income after a specified period (deferment or ‘waiting period’). The length of time the benefit is paid may be based on whether you have short-term (1 or 2 years) or long-term income protection. Long term income protection would be paid until you are fit to return to work or retire, whichever is sooner.
Usually, you can select a waiting period of between one and twelve months before your policy starts, the deferred period is generally governed by how long you can survive financially on savings, sick pay or without income. Working with us we help to determine the right deferred period for you. Normally, the longer you wait to receive your income protection payments, the cheaper the policy.
Income protection payments are usually based on a percentage of your earnings: 50% to 80% being the norm. For example, if you earn £50,000 per year and you took out a policy designed to cover 70% of your earnings, over the course of a year your policy will pay out £50,000 x 70% = £35,000. Currently this is tax free income (but remember tax rules can change)

What are the benefits of income protection?

According to Which?,
‘The one protection policy every working adult in the UK should consider, is the very one most of us don’t have – income Protection.’
Many people take out life insurance policies, particularly when taking out a mortgage, when they have children or get married. The reality is, accidents and sickness can happen to people of all ages, fitness levels and walks of life at any time. You don’t have time to plan for an accident or illness. 
If you were unable to work, would you be able to cover living costs?
Income protection insurance could help you to pay:
• Mortgage or rent payments
• Household bills
• Childcare costs
• Car finance or loans
• Household alterations – injury/disability
As well as the above, Income protection can help you to maintain your standard of living.

When deciding if income protection is right for you, you may want to consider the following:
• Savings – if you have enough savings, you may be able to get by without an income. But remember, you could need enough savings to cover you for a long period of time.
• Employer sick pay – always check your contract of employment carefully to see how much you are entitled to from your employer if you are off sick, and for how long.
• Government benefits – you may be able to survive on government benefits, but think carefully – would benefits cover all of your outgoings? Would you still be able to afford hobbies and holidays?
• Partner support – perhaps your partner earns enough for the two of you, so a drop in income would not particularly affect your lifestyle.

One of the factors of protection insurance is the financial cost, so we have provided two real life examples for you to provide an indication of the financial commitment.

 

Real life income protection examples as of July 2020:

A 30 year old non smoking female taking home £2,300.00 each month in her job as an account executive receives £1,750.00 per month Income Protection. She will receive this monthly benefit or up to 1 year continuously, following an accident or illness leaving her unable to work (it resets after returning to work for 6 months). With a deferred period of 4 weeks (the policy starts paying after the first 4 weeks have passed) with a term until she is 65 years old. The cost is only £16.91 a month, that’s less than 6 take away coffees a month.

A 40 year old non smoking male taking home £1,667 each month in his job as an account executive receives £1,250.00 per month Income Protection. He will receive this monthly benefit for up to 2 years continuous, following an accident or illness leaving him unable to work (it resets after returning to work for 6 months). With a deferred period of 4 weeks (the policy starts paying after the first 4 weeks have passed) with a term until he is 65 years old. The cost is only £17.08 a month, that’s less than 6 take away sandwiches a month.

For more information and to gain a free quotation please get in touch.

 

 

Family Income Benefit

Family Income Benefit (FIB) is an alternative to or can sit alongside normal life insurance. Claims are paid to the beneficiary as a regular income rather than a lump sum for your loved ones if you die during the term of the plan. There is no cash-in value, so if you stop making payments, your cover will end. Most families rely on at least one regular monthly salary to cover their household spending. As with normal life assurance FIB is currently tax free.

Generally clients take out FIB to cover expenses for their children and school/university fees, until they become independent.

 

Private Medical Insurance (PMI)

Private medical insurance, sometimes known as health insurance can be a compliment and supplement to what you receive and is available through the NHS. You might decide it’s worth paying extra to have more choice over your care, if you don’t already have it as part of your employee benefits package and of course you can afford to pay the premiums.

The majority of UK residents are entitled to free healthcare under the National Health Service, which provides an amazing service which we are lucky to have, however we all hear the stories of the NHS being overstretched and over budget along with long waiting times and some level of rigidity. Although the majority of treatment is free under the NHS it can be restrictive in decisions about treatments etc due to it’s limited budget.

Health insurance pays all, or some of your medical bills if you are treated privately. It gives you a choice in the level of care you get and how and when it is provided. Because you are paying for it, it works to suit you, your timeframes and your schedule.
However you don’t have to take out private medical insurance, you can simply pay as you go, if you don’t want to use the NHS for something, you may find it expensive and hindering to pay for private treatment without insurance, especially for serious conditions or long investigative conditions, or such like.

What does it cover?

Like any insurance you buy, the cover you get from private medical insurance depends on the policy you take out, we can help you choose the right options for your requirements.

For example:
Basic private medical insurance usually covers the costs of most in-patient treatments (tests and surgery) and day-care surgery. Some of the new policies are supporting a healthier lifestyle.

You can choose a policy which covers mental health, depression and sports injuries which are not often covered as standard.

Private medical insurance is a personal choice, treatment is free on the NHS, but it is an extra peace of mind. You should really consider medical insurance if:
• You want to be covered for drugs and treatment you can’t get on the NHS, like specialist surgery for sports-related injuries (check that the treatment is included in your policy before you buy)
• You just don’t want to use the NHS and would prefer to stick to private hospitals where possible
• You prefer shorter timescales to being referred and seeing specialists
• You would prefer not to wait for NHS treatment
• Your doctors practise has long waiting times to see them and there is no or little flexibility around dates and times of appointments.

PMI has many options please get in touch for advice on the right policy for you and your family

If you think Insurers don’t pay out, think again

Insurers DO pay out; New figures released by the Association of British Insurers (ABI) and Group Risk Development (GRiD) show that the insurance industry paid out more than £5.7 billion in protection claims in 2019 – a year on year increase of over £470 million on 2018 – with the percentage of claims paid rising to 98.3%. This is the highest percentage of claims paid on record.
There are many variants and options available for protecting yourself and your family. We are experts in assessing your needs and providing an affordable solution to suit your circumstances.

For more information on Protection Insurance please contact us on 01423 561060 or email info@sj-fs.co.uk